Shuchi Bansal: How print beat television

The print media has outperformed TV and its advertising share has been growing. And this time Indian language publications are also getting the cream, not just the English press.

The tension in Dainik Jagran's marketing office at Okhla in Delhi is palpable. The media company's second Hindi newspaper is about to hit the stands in Kanpur and Lucknow. Meanwhile, at The Times of India office in Delhi, Bennett, Coleman & Co's executive director Ravi Dhariwal is neck deep in plans for the launch of the group's new compact city paper, in a novel collaboration arrangement with his prime competitor in the city, Hindustan Times. "We'll catch the new year," Dhariwal says. Not to be left behind, Mid-Day Multimedia is planning to print a Delhi edition of its popular Mumbai tabloid, Mid-Day, and then expand to other cities as well. Mid-Day entered Bangalore last May.

Expansion is the operative word in the newspaper industry "" within existing marketing terrain and by entering new territories. Lower cover prices, spreading literacy and rising incomes have translated into rapidly growing newspaper sales. Elsewhere in the world, print may be losing out to television and the Internet, but in India, the leading print media players enjoy revenue growth rates of between 20 and 30 per cent, with even faster growth in profits because advertising has been buoyant.

Sample some numbers: Jagran Prakashan, which publishes Dainik Jagran, saw its first half (April-September) 2006-07 revenues total Rs 278.4 crore, with net profit of Rs 40.4 crore. This was a sharp jump from profit of Rs 11.7 crore in the same period last year. HT Media (which publishes Hindustan Times) matches that stellar performance. It reported a 32 per cent increase in revenue at Rs 505.3 crore in April-September, while profit after tax more than trebled to Rs 57.5 crore, from Rs 17.8 crore a year earlier.

In contrast, the television news channels are struggling. NDTV's second quarter results (July-September) were nothing home to write about as the company registered an operating loss. Aaj Tak's promoter TV Today Network, meanwhile, posted a modest net profit of Rs 3.28 crore for the September quarter. In the last financial year, it had posted a net profit of Rs 2.37 crore. The outlier company here is TV18, which reported handsome profits of Rs 16 crore in the July-September quarter.

In the print media, though, prosperity has been spread all around "" though precise figures are not available because most companies are unlisted. The Kolkata-based ABP's CEO, Pramath Sinha, will not disclose the company's profit figures but says that it has been growing at 25 to 30 per cent. Writers & Publishers, which brings out the mass-circulation Dainik Bhaskar (in Hindi) and Divya Bhaskar (in Gujarati), also claims a 30 per cent rate of growth for the last two years. Media analysts say the company earned a profit of more than Rs 100 crore last year, and Bennett, Coleman about Rs 800 crore. Dhariwal does not endorse that last figure but says the company enjoys a 20 per cent growth rate.

Underpinning this prosperity for print is a smart fightback in the advertising market. According to an ADEX (the advertising monitoring division of TAM) report, in 2005 print advertising grew 16.1 per cent, far ahead of television's 11 per cent. Just three years ago, in 2003, print was logging only 8 per cent growth, well behind TV's 10 per cent. Media analysts agree that in the last three years the print media has outperformed television and its advertising share has grown from 46 per cent to 48 per cent. "Print has reversed the trend," confirms Mid-Day Multimedia's chief financial officer, Manajit Ghoshal.

The difference this time is that Indian language publications are also getting the cream, not just the English press. Says Jagran Prakashan's CEO Sanjay Gupta: "The economy is doing well and regional advertising is growing as companies realise that not all consumer goods are sold in the metros." The Bhaskar group's director (marketing) Girish Agrawal endorses that view, but adds that only the No. 1 and No. 2 players in each market are profitable. "Yes, growth is coming from language publications. Advertisers have realised that the language press delivers them the right market." Analysts say that advertising growth in the language press may now be faster than the 16 per cent print industry average, and going up to as high as 20 per cent.

The explanation lies partly in local advertisers flocking to the print media. Explains Dhariwal: "Television is truly a 'reach' medium while print targets geography." Advertising categories, such as retail and real estate, which target a geographical area, have carpet-bombed newspapers with their campaigns in the last couple of years. Says an HT Media executive: "In the last two years, local level advertising has grown in stature and spend." Agrees Sanjay Gupta: "A retail advertiser who used to spend Rs 10,000 with us some years ago is now spending Rs 10 lakh." To tap this market, Jagran has gone local with a vengeance. "We have over 200 sub-editions of Dainik Jagran. The paper in Delhi alone has 13 editions. This helps us offer extremely local content and targeted markets, which TV cannot do."

Innovative positions for advertising have also played their role. Newspapers are now open to allowing advertisers to put cover jackets on a newspaper, and print ads in varied shapes and sizes. Dailies like The Times of India and Dainik Jagran have also introduced all-colour papers in the last two years. Says Dhariwal: "It may be a small step but it's had a huge impact." Dainik Jagran, for instance, saw a jump of over 40 per cent in its colour advertising.

Print has also fought back by constantly tailoring content to suit consumer needs, while there has been no shortage of marketing innovations. Dainik Bhaskar, for instance, pioneered mass consumer contact programmes prior to launching a paper, with a door-to-door consumer research campaign that tested reader requirements and simultaneously created market awareness. Jagran's soon-to-be launched "youth paper" is based on similar market research.

Simultaneously, fierce competition in the electronic media has depressed its revenues as ad rates have got discounted. "There's a surfeit of channels "" both in news and entertainment. The marginal players, scrambling to make ends meet, push down advertising rates. That has a spiralling effect," says a media industry expert. Besides, TV audiences are getting fragmented as channels multiply; in contrast, growing newspaper readership means that print can offer assured market reach. "In a fragmented TV market, media planners have understood the value of advertising in print," says Bhaskar's Agrawal.

But not everyone is impressed. "The leading newspaper brands have flourished as they operate in either a monopoly or a duopoly market. The fun begins now, as some of leaders are being challenged on their home turf," says Ravi Kiran, media agency Starcom's India chief in Mumbai. Deccan Chronicle, for instance, is giving The Hindu a tough time in Chennai. Competition from Hindustan Times and DNA is putting pressure on The Times of India in Mumbai, even as the latter poses a challenge to ABP's The Telegraph in Kolkata.

Ravi Kiran also feels that print in general is not making as much profit as is being made out. "Remember that print has many times the number of players as TV, for ad spends that are comparable."

The good news for print is that sales will continue to grow as literacy rates improve and incomes rise. Newspapers could also tap the 360 million potential consumers who can read but do not subscribe to any newspaper today. On the cost side, newsprint prices have stopped soaring and even taken a dip, thanks to the arrival of Chinese newsprint in the country. It's not difficult to see, then, why Mid-Day is eyeing new cities and why the Jagran CEO is so excited about introducing a new brand.